Even as billions of dollars in public money poured into vaccine development, drug manufacturers hesitated to discuss how they would rate a shot. They say it is the result of many factors including effectiveness, trial results, development and manufacturing costs, competition, demand, and whether the buyers are private groups – like insurers – or government agencies.
The urgency and global spread of the pandemic have added complexity. In the rush to develop the right vaccine, companies are experimenting with different technologies. Then, in an unprecedented move, some drug manufacturers plan to allow other companies to make their doses, making it even more difficult to calculate.
The prices of all vaccine deals have been kept secret and companies and public institutions are defending their right to confidentiality. However, people who were briefed on talks between drug makers and the European Commission say AstraZeneca sold its push for around $ 3 to $ 4 a dose under contracts with the EU, while the one jointly developed by Sanofi and GSK Shot by Johnson & Johnson and the vaccine arrived at about $ 10 a dose.
In contrast, Moderna – a newer and still loss-making company – has attempted to bump its vaccine at around $ 50 to $ 60 per course of two bumps after initially asking for nearly double that amount. Other biotechnology companies such as CureVac have announced that they will aim for an “ethical margin” on their prices.
Civil society pressure and media reports have prompted some companies to disclose their forecast list prices. Moderna did so in August, posting a max price of $ 37 per dose.
Sinovac, one of China’s leading vaccines, started selling its vaccine for $ 60 for two shots in select cities this week as part of an emergency program involving hundreds of thousands of participants.
At the heart of the discussion is an ethical as well as practical question: should pharmaceutical companies work with rich countries to ensure that charges against poor nations are limited.
For example, Mr Gates said the Financial Times’ drug companies should support a system where rich countries subsidize vaccines so poor nations pay $ 3 or less per dose.
“The price takes three tiers, in which the rich countries pay back a large part of the fixed costs, the middle-income countries pay back some of the fixed costs and the poorer countries pay real marginal costs,” said Gates, co-chair of the Bill & Melinda Gates said Foundation in an interview.
The billionaire software developer who became a health philanthropist says that any successful vaccine must be available wherever it is needed at a cost that is not prohibitive. “We actually had to explain to some CEOs of pharmaceutical companies that this rating is absolutely necessary in a non-profit context in order to maximize human benefit.”
The price requires three tiers, in which the rich countries pay back a large part of the fixed costs, the middle-income countries pay back some of the fixed costs, and the poorer countries pay real marginal costs
Some manufacturers in countries like India, which has a large drug manufacturing industry, have criticized Western drug manufacturers for trying to prop up prices by not ramping up production to meet demand.
“They don’t want to give it to the rest of the world because they have to compete with me for $ 3 [a dose]”Said Adar Poonawalla, executive director of the Indian Serum Institute, the world’s largest vaccine manufacturer. “We make a small margin, but that’s perfectly normal,” he said. He added that higher production costs in Europe did not justify the price difference between his company’s products and those of some western vaccine manufacturers.
Gavi, the United Nations-backed Vaccine Alliance, and the Gates Foundation signed a contract with Mr Poonawalla’s institute last month to supply up to 200 million doses of vaccine candidates licensed by AstraZeneca and Novavax to countries with low levels and middle income to a maximum of 3 USD per year extended dose – with the option to increase the volume of the order many times.
Other initiatives in support of global access include epidemic preperation efforts by the Coalition for Innovation, which is co-funding nine vaccine candidates with a mix of partners including large corporations and academic institutions.
However, the Covax initiative, the flagship of the World Health Organization to provide 2 billion Covid-19 vaccinations to poorer countries by the end of next year, had to postpone its full launch until this month after struggling to attract rich countries.
Mr Gates said he had long-term confidence that competition would keep prices down. “By the end of the year, or certainly the first quarter of next year, two or three of the top six vaccines are likely to be effective and then we’ll go to the races,” he said.
But he also acknowledged that prices for certain vaccines were likely to stay higher than others. For example, mRNA vaccines like those from Moderna and the partnership between Pfizer and BioNTech are more expensive to manufacture than vaccines based on an adenovirus vector like the shot developed by AstraZeneca and the University of Oxford.
A fundamental challenge to effective planning and pricing is that everyone involved had to reduce the normal 10-year vaccine development cycle to a fraction of that time, said a senior EU official.
“We are now trying to compress this down to 12-18 months and not just produce a few vaccines, but produce them on the order of hundreds of millions – even billions -” the official said. “It’s a risky business.”
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